8 Ways to Conquer Your Student Loans in 2015
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The following is a contribution from Allen at Achieve Lending. If you’d like to contribute to Frugal Rules, please contact us.
Whether you are in school, out of school, or about to start your four-year collegiate journey, student loans will be a large part of your life. They might play a small, temporary role or, like so many graduating collegians, student loans might occupy a large part of your financial life for many years to come.
Navigating student loans can be frustrating, time-consuming, and worst of all, expensive if not handled properly. Below are eight tips on how to tackle your own student loan burden in 2015 and see success in fitting them into your financial goals, rather than organizing your financial future around them.
#1 – Make a Master loan List for your student loans
You can write it in a notebook, start an excel spreadsheet, or use a Google Document. Either way, by making a master list of each student loan you have, its corresponding interest rate and term, you’ll always know exactly which of your loans is costing you the most money.
**Additional resource: Are you looking for options to consolidate your student loan debt? Sign up through this link to get a $200 bonus from SoFi and qualify for fixed rates as low as 3.5% or variable rates as low as 1.9% by signing up for auto-pay.
#2 – Don’t wait to Pay
If you are still in college, try paying interest on your loans before you gradate. Paying on the interest instead of letting it accrue in deferment can save thousands of dollars over the four years you’ll be enrolled in school.
#3 – Pay Down Principal Faster
Contributing even an extra $20 dollars towards each payment can help reduce your principal, which means you’ll pay less on interest and more on knocking out that big balance.
#4 – Borrow Less, Not More
Money Magazine recommends not taking out a loan amount greater than what you would expect to make in your first year out of school. While many students may be surprised to learn just how low starting salaries for recent graduates can be, researching salary.com for related jobs in your industry can also give you a good idea. Having a realistic expectation of what you will earn, helps you make wise decisions about how much to borrow now.
#5 – comparison shop
Many students simply take the loan options offered to them through their school, or sign for the first loan offer they receive, usually from a large bank. While this may be the most convenient option, competitively shopping interest rates is the #1 thing you can do to make sure you get the lowest rate possible and save the most money on your loan.
It may not seem like a big deal while in school, but after four years you could be thousands of dollars in debt, and end up paying thousands more over the life of the loan. Using a student loan search engine, such as Achieve Lending, can help you quickly and easily find the best loan offers and make the most informed decision possible. Think of it as comparison shopping for lower rates. 🙂
#6 – Include Loan Payments in Your Budget
It can be hard to make room for hefty loan payments in any budget. That’s especially true when money is tight. Make sure your loans get paid and on time by building the loan payment into your budget. You extra bonus points if you can find additional ways to cut costs and contribute extra money above your minimum payments!
#7 – Automate Bill Pay
Paying debts and bills is always easier when it is automated. Then the money gets transferred seamlessly and you’ll never notice it is missing! Try adding an extra $20 or $50 each month to your automatic loan payment and watch your student loan start to disappear.
#8 – Refinance Interest Rates
If you have multiple loans through multiple vendors (federal, private, or both) refinancing those loans into one interest rate and payment can greatly reduce the money you owe over time, or net you a lower monthly payment. Refinancing is a great option for those struggling to pay multiple student loans, or for those who want to get strategic with their loan repayment and pay it off faster.
What methods did you follow to pay off your student loans? If you’ve paid them off already, what was the trick that helped you kill them? Were you able to start paying off your loans while you were in school?
Allen Kors is the Founder and CEO of Achieve Lending, the first ever search engine for education loans. Designed to help both traditional and non-traditional students find the best student loans, Achieve Lending offers users a free online portal to search, find, and compare student loans, often in as little as 30 seconds.
Kors founded Achieve Lending at just 27 years old after six years of working in the finance industry. His resume boasts time spent at the world’s premier financial firms, with positions in investment banking, private equity, angel investing, and consulting. After leaving his job in angel investing to pursue entrepreneurship and form his own financial technology company, Kors now aims to build the ‘Kayak’ for education loans and empower Achieve Lending users by providing financial education on the loan process and terminology.
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